Win Some, Lose Some

THAT left was the closest anybody got to summing up the first-ever WTO ministerial conference in Singapore. On December 13, the last day of the high-profile five-day negotiations, as 128 countries cobbled together a last-minute agreement, everyone seemed to have won. Said European Union (EU) Trade Commissioner Sir Leon Brittan: "It’s astonishing that we’ve got agreement on a text that’s not just papering over the cracks but genuinely important."

Those were the cracks that India felt the most. As some of its developing allies like Malaysia and Indonesia ditched it at the last moment on contentious new issues like adoption of core labour standards and TNC investment, India had no choice but to fall in line. While Finance Minister P. Chidambaram expressed "unhappiness" over the two working groups set up on trade and investment and competition policy, Parliament resounded with Opposition accusations of "sellout of national interests". Said Ashok Mitra of the Left Front, economist and Rajya Sabha MP:

"Since there was no unanimity on investment, we should have stuck to our stand like we did in the case of CTBT." Commerce Minister B.B. Ramaiah’s assurance in Parliament that "national interests had been fully safeguarded" did little to assuage feelings. Did India really lose a lot and win nothing? Was the Singapore round only a damage control exercise by the developing world, since it was already known that the North would try to revive these issues?

Says economist Bibek Debroy:"Since economic clout matters at WTO, and not votes, by retaining our hard, principled stand of the G-15 meet at   Harare, we made a big mistake. This is especially in relation to the soft set of issues where there wasn’t much of a consensus to begin with— government procurement, trade and investment linkage and information techonology"

(see bo x). Counters Commerce Secretary Tejendra Khanna: "We had excellent coordination among the South Asian and ASEAN nations. We have been saying all along that the WTO should not try to set new traffic rules for trade, but just restrict itself to implementation. So we didn’t have a new agenda to discuss. It’s ridiculous think of a loss merely because of a study on investment. The studies were man-dated, we can’t avoid it."

The thorniest issue in Singapore was the developed nations’ effort to push through a Multilateral Agreement on Investment (MAI), giving TNCs of WTO members the right to set up business in any country, conduct it without discrimination and settle any dispute at the WTO, which was later toned down to starting an "educative process". The EU also wanted a competition policy to prevent monopolist practices, believed to be targeted at India’s public sector giants. India and seven other countries, including Malaysia and Indonesia, issued a joint statement in Geneva on October 28 saying that UNCTAD was already conducting a study on a multilateral framework and WTO was not the right place to discuss it. "Any review of the adequacy of the treatment of trade and investment in the WTO should take place only in the course of the review of TRIMs (trade related investment measures). An attempt to introduce the issue through a separate track would upset the balance of the Uruguay Round."

How did then, argues Khanna, the WTO study on trade-investment links or on competition, inevitable under Article 9 ofTRIMs by 1999- 2000, become a new mandate? Also, "we ensured that the study doesn’t automatically graduate into negotiations. After two years of study, the results will be studied at the second conference and then there is a

Laxmanrekha of ‘explicit consensus’. Every country will have to raise its flag and say, yes, we support further negotiations." However, going by the lack of consensus manifest at Singapore, that may not sound too reliable and a WTO stand on trade and investment seems a fait accompli. As for competition policy, the phrase "anti-com-petition measures" is understood to be taking care of dumping fears.

EVEN in core labour standards, India was clearly marginalised into accepting a study. At Marrakesh, the US argued that the competitive low-wage advantages of developing countries is a myth because that’s achieved at the cost of low labour standards. While that argument is specious— why should then US have low interest rates compared to record high levels in India —it’s also true that WTO recognised the ILO’s role in setting and implementing these standards. India’s record, Debroy points out, in ratifying ILO conventions is much better than say, Germ any’s, though their implementation is poor due to the unorganised state of Indian labour markets.

In fact, feels Debroy, India has not lost anything in these areas, including Government procurement, considering that its reforms are by now irreversible. The erosion has been of a global image, of appearing unnecessarily intransigent, and in bargaining power. For instance, in textiles and agriculture, it could hardly push through its unhappiness at the way the Uruguay Round Agreement on Textiles and Clothing is being implemented by developed countries, while the US openly linked better implementation and market access in these areas to labour standards. Says Debroy: "Despite not having a policy, except for the FIPB, that’s biased against foreign investors, the rigid stance on MAI may have lost us bargaining possibilities in market access. Or cross-border movement of skilled personnel." Adds Mitra: "We’re a major industrial country, geo-politically strong and resourceful, but we have never asserted ourselves. We have never bothered to find out how the WTO can benefit us."

The infotech agreement, for instance, where global trade amounts to $500 billion and is poised to rise to $700 billion in two years. Under pre ssure from its domestic ha rdware lobby, India is offering only 40 items, mostly intermediates, for zero- duty access by 2000 AD, compared to around 210 odd items on global offer. But the agreement, which the better-off developing countries having a major share in the global IT trade have initialled, will one, give dutyfree access to Indian software exports which will be immensely profitable in the long run, and two, bring down domestic prices of several items to global levels.

Sources say that while the Ministries of Commerce and External Affairs were ready to be flexible in Singapore, the Prime Minister’s Office was finally responsible for continuing with the rigid stance. In several areas bypassed at Singapore— tariff barriers, intellectual property rights, telecom, and services, on which it faces a trade review soon— India has always been on the defensive, protecting itself against

"rich and powerful nations", even as global trade rules change in favour of compet-itiveness, technology edge, quality and entrepreneurship. Unless India discards that mindset, with a 0.6 per cent share of global trade, it will continue to be left on the fringes.